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Metanor Resources Inc
Symbol MTO
Shares Issued 438,785,949
Close 2017-02-07 C$ 0.06
Market Cap C$ 26,327,157
Recent Sedar Documents

Metanor earns $1.98M in fiscal Q2 2017, raises guidance

2017-02-08 11:20 ET - News Release

Mr. Ronald Perry reports

METANOR REPORTS NET INCOME OF $2 MILLION FOR THE QUARTER ENDED DECEMBER 31, 2016; RAISES GUIDANCE

Metanor Resources Inc. has released its financial and operating results for the quarter ended Dec. 31, 2016 (second quarter of fiscal 2017). This press release should be read in conjunction with Metanor's financial statements for the quarter ended Dec. 31, 2016, and related management's discussion and analysis; both of these documents can be found on the company's website or on SEDAR.

Second quarter fiscal 2017 highlights

Bachelor property:

  • Gold production of 9,764 ounces in the second quarter;
  • Gold sales of 10,430 ounces in the second quarter;
  • Revenue of $15.9-million from gold sales in the second quarter at an average sale price of $1,522 per ounce sold ($1,141 (U.S.) per ounce);
  • Cash cost (1) of $889 per ounce sold in the second quarter ($667 (U.S.) per ounce);
  • Sustaining cost (2) of $1,075 per ounce sold in the second quarter ($806 (U.S.) per ounce);
  • All-in cost (3) of $1,208 per ounce sold in the second quarter ($905 (U.S.) per ounce).

(1) The cash cost is composed of all costs related to the mineral extraction and processing, including royalties associated to the property, and byproduct credits.

(2) The sustaining cost is composed of the cash cost, and all costs related to sustain the existing operation, such as capital and exploration expenses at the existing mines, and the corporate administration cost.

(3) The all-in cost is composed of the sustaining cost, and all costs related to corporate exploration and evaluation.

(4) Exchange rate of 75 U.S. cents per $1 Canadian dollar used in U.S.-dollar calculations.

Barry property

During the quarter, the company filed a preliminary economic assessment (PEA) for the Barry property prepared by independent consultants Goldmind Geoservices Inc. The economic evaluation was based on the recently updated resource estimate for the Barry open pit (see the press release dated Sept. 22, 2017).

Highlights from the PEA include:

  • Pretax net present value (at a 6-per-cent discount rate) of $53.5-million;
  • Pretax internal rate of return of 198 per cent;
  • After-tax net present value (at a 6-per-cent discount rate) of $25.9-million;
  • After-tax internal rate of return of 94 per cent;
  • Life-of-mine gold production of 193,457 ounces over nine years;
  • Life-of-mine strip ratio of 2.17:1.

Financial highlights:

  • The company reported net income of $1.99-million for the three months ended Dec. 31, 2016.
  • The company had $3,093,255 in cash on Dec. 31, 2016.

                Q2 2017 OPERATING AND FINANCIAL RESULTS

Operating and                   Quarter ended              Six months ended 
financial              Dec. 31,       Dec. 31,                      Dec. 31,  
results                   2016           2015           2016           2015 

Operational                                                                 
results                                                                    
Tonnes milled                                                               
(tonnes)                61,790         54,426        124,764        110,874 
Feed grade (g/t)           5.1            4.6            4.7            4.6 
Mill recovery                                                               
rate                     96.5%          96.7%          96.3%          96.6%
Ounces produced          9,764          7,774         18,163         15,834 
Ounces sold             10,430          7,476         18,323         15,273 
Underground                                                                 
development                                                                
(metres)                   999          1,768          2,116          3,362 
Diamond drilling                                                            
(metres)                18,423         18,062         37,459         35,387 
Financial                                                                   
results                                                                    
(in thousands                                                                  
of dollars)                                                                   
Gold sales             $15,875        $10,179        $28,538        $20,920 
Operating costs         (8,908)        (9,848)       (17,431)       (18,517)
Royalties                 (368)          (216)          (591)          (432)
Depreciation and                                                          
depletion               (3,289)        (2,629)        (5,989)        (5,322)
Gross income                                                                
(loss)                   3,310         (2,514)         4,526         (3,351)
Net income                                                                  
(loss)                   1,985         (3,765)         1,783         (5,781)

During the quarter, a higher feed grade resulted in more ounces sold and a reduction in operating costs, compared with the same quarter in 2015. The mine generated an operating income of $3.3-million which was reinvested into the exploration on the Bachelor, Moroy and Barry properties.

Outlook for the coming quarters

Metanor raised its production guidance for the year to a range of 30,000 ounces to 36,000 ounces of gold from 28,000 ounces to 33,000 ounces. Management anticipates that the feed grade for the upcoming quarter will be similar to that of the second quarter of fiscal 2017.

The company plans to publish a resource and reserve update for the Bachelor mine within the current quarter, ending March 31, 2017. Meanwhile, an underground drill program will continue over the coming months in order to test additional targets outside of the soon-to-be-reported reserve update.

At the Barry property, Metanor continues drilling within the Barry open pit in order to increase mineral resources and to convert inferred resources into the indicated category. The Barry open pit remains open in all directions, demonstrating potential to increase in size.

Qualified persons

Pascal Hamelin, PEng, vice-president of operations, is the qualified person under National Instrument 43-101, responsible for reviewing and approving the technical information contained in this news release.

We seek Safe Harbor.

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